Moody's downgrades toll road credit rating again

Updated 7:39 pm, Tuesday, October 15, 2013

SAN ANTONIO — Not even the nation's highest speed limits have been enough so far to repair the Texas 130 toll road's deteriorating finances.

On Tuesday, Moody's Investors Service again downgraded the credit rating of the private company that built and operates the road. The ratings agency raised the possibility of SH 130 Concession Co., which is owned by Spain-based Cintra and San Antonio-based Zachry American Infrastructure, defaulting on its debt unless traffic increases on the Central Texas road that connects Seguin to Mustang Ridge, just south of Austin.

Moody's slashed the company's credit rating from B1 to Caa3 — junk status — after less-than-expected traffic on the 41-mile road, which boasts an 85-mph speed limit and is an alternative to congestion-clogged Interstate 35.

The company's rating covers a $686 million senior secured bank loan and a $493 million federal Transportation Department loan.

Business Channel

Nike to Investigate Workplace Behavior, Announces President will ResignWibbitz

You Can Only Make Reservations at This Restaurant By Sending a Post CardBuzz 60

An Emirates Flight Attendant Dies After Falling Off PlaneBuzz 60

How has digitalisation transformed travel marketing?Euronews

Passengers Travelling With Small Child Taken Off Southwest Flight From Chicago to AtlantaStoryful

'3 Kings' of hip-hopFox5

ESports Continues To Intrigue InvestorsWochit

Is This the End of Candy Hearts? America's 'Oldest' Candy Company Could CloseVeuer

See IBM’s New Computer That Is Smaller Than A Grain Of SaltBuzz 60

Cats Ride Robotic Stuffed CrabJukin Media

In a written statement, SH 130 Concession Co. spokesman Chris Lippincott said the company is aware of the Moody's report and continues to meet its contractual obligations “to operate and maintain a world-class highway.”

“We remain confident that the recently opened SH 130 Segments 5 and 6 will benefit our investors and the people of Texas,” Lippincott said. The state built and operates segments 1 through 4 of the Texas 130 toll road, which was constructed earlier and runs from Georgetown to Mustang Ridge.

Texas 130 is the first public-private toll road in the state, designed to alleviate traffic on I-35. The Texas Department of Transportation owns the road, but the concession company has a 50-year lease to operate and maintain it.

The company's credit rating previously had been downgraded in April. At the time, Moody's said traffic counts were about half of initial projections, forcing the company to tap its financial reserves to make loan payments. That month, the Texas Transportation Commission authorized discounts for truckers who used the road.

“Since then,” Moody's latest report said, “the additional six months of traffic and revenue show monthly growth but not at rates necessary to generate sufficient revenue to meet operating and debt obligations through the June 30, 2014, debt service payment.”

Toll revenue has missed initial forecasts by 55 percent since Texas 130 opened last October, the Associated Press reported.

TxDOT and the concession company recently installed almost 400 signs along I-35 and some on Loop 410 in San Antonio to direct drivers to Texas 130.